What protections do microbusinesses get in energy contracts?

First, are you a microbusiness?

You're a microbusiness if you meet any one test: fewer than 10 employees and turnover or balance sheet of no more than €2 million; or use under 100,000 kWh of electricity a year; or under 293,000 kWh of gas a year. You can count as micro for one fuel and not the other. Our guide what is a microbusiness for energy has the details.

The protections

Clearer contracts and broker costs

Since 1 October 2022, broker costs must appear in your Principal Terms as a total in pounds and pence for the whole contract. Suppliers have been able to deal only with brokers signed up to a qualifying dispute scheme since 1 December 2022. These rules were extended to all non-domestic customers from 1 October 2024 (fee disclosure) and to small businesses from 19 December 2024 (dispute schemes).

Out of contract

No termination fee applies, and you can't be required to give notice to switch, except under an evergreen contract, where up to 30 days can be required.

Rollovers

Automatic rollovers can't exceed 12 months, and the supplier must meet renewal information requirements; see can my supplier renew my contract automatically.

Backbilling

Suppliers are barred from billing beyond 12 months in most cases for domestic and microbusiness customers. Small businesses are not covered. See business energy back-billing.

Redress

You can take unresolved complaints to the Energy Ombudsman after 8 weeks or with a deadlock letter, within 12 months. Suppliers must also signpost microbusinesses to Citizens Advice.

What you don't get

There is still no cooling-off period, no price cap, and Ofgem doesn't directly regulate brokers. See cooling-off and are energy brokers regulated.

Example

A florist uses 18,000 kWh of electricity a year, so she is micro on the usage test. Her supplier's bill covers 20 months of missed charges. Because the 12-month backbilling limit protects microbusinesses, she should only face the last 12, unless an exception such as meter tampering applies.

How to use these protections

• Keep copies of Principal Terms and renewal letters.
• Quote the rule when you write to the supplier, for example the 12-month limit on rollovers.
• If a supplier says it has no duty to help, ask it to cite the rule, and escalate to the Energy Ombudsman if it will not.

Small businesses (fewer than 50 employees and turnover up to £6.5m or balance sheet up to £5m, or up to 200,000 kWh electricity or 500,000 kWh gas) have gained some of these protections, including Ombudsman access and broker dispute schemes, from 19 December 2024.

Why the label matters

Your supplier decides how to classify your account, usually from the size of your usage or company details. If you believe you qualify but are treated as a larger customer, ask them to review it, since the protections above depend on it.

Next steps

Check which tier you're in and tell your supplier if the account is wrongly classed. Read energy disputes and the Ombudsman.